On January 12, 2021, Sarah Cronin was quoted in AmBest on how COVID-19 restrictions are impacting the film industry. According to the article, pandemic and communicable disease exclusions were notably absent from policies crafted to protect policyholders from the myriad factors that can interrupt a project. The insurance industry is regrouping, adding exclusions, reducing limits, and looking for workarounds that allow production companies to secure financing and continue to operate.
Cronin said larger studios will move forward by self-insuring $1 million or more of pandemic risk, but smaller companies “might not have that kind of flexibility.” That has repercussions. “Insurance is tied to financing and completion bonds to back it up. A lot of smaller productions are not being made” because the people financing projects need assurances that producers can weather a temporary shutdown.
COVID-19 touched every aspect of production insurance, she said, from specific lines to errors and omissions and commercial general liability. So much money has been lost that litigation has followed, said Cronin. “It’s at the very, very beginning. I would say it will take two years, optimistically, to resolve.”
While insurers and insureds grapple with tough issues sparked by the pandemic, she agreed productions are moving forward. “The industry will adapt. People are being creative, trying to find workarounds, and the industry is trying to partner with policyholders so no one is losing their shirt.”